What a Government Shutdown Means for FHA Lending

What a Government Shutdown Means for FHA Lending

As of early afternoon on Sept. 30, lawmakers were discussing short-term budget legislation, called a continuing resolution, to pay for federal government operations after midnight tonight. U.S. Department of Housing and Urban Development officials have updated the National Association of REALTORS® on what to expect concerning the status of Federal Housing Administration loans with a federal government shutdown looming at midnight eastern time.

The Office of Single Family Housing will endorse new loans under current multi-year appropriation authority in order to support the health and stability of the U.S. mortgage market. (FHA endorsements currently represent 15% of the market.) Approximately 80% of FHA loans are endorsed by lenders with delegated authority. The remaining 20% are endorsed through the FHA Homeownership Centers, leveraging FHA staff with a contractor that works on-site.

The Office of Single Family Housing will maintain the minimum operations necessary to support FHA’s existing portfolio.

The FHA Call Center and the National Servicing Center’s Call Center will remain open.

Any function of FHA that is funded through a multi-year appropriation or where the failure to perform those functions would result in an imminent threat to the safety of human life or the protection of property will continue. FHA's portfolio of insured mortgages – multifamily, healthcare, and single family, as well as commitments entered into for project-based rental assistance are within those functions.

The Office of Housing will continue to work on planned sales of defaulted notes, as required for the orderly termination of HUD’s fiduciary insurance and servicing obligations.

In anticipation of a possible shutdown, NAR is consulting with officials from the U.S. Department of Housing and Urban Development, Fannie Mae, Freddie Mac, Ginnie Mae, FHA, VA, and the Rural Housing Service, among other agencies, and will post information on how a shutdown is expected to affect these agencies’ operations.